The Supreme Court says states can force online shoppers to pay sales tax.
The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.
The high court ruled Thursday to overturn those decisions. They had resulted in some companies not collecting sales tax on every online purchase. The cases the court overturned said that if a business was shipping a product to a state where it didn't have a physical presence such as a warehouse or office, it didn't have to collect the state's sales tax. Customers were generally supposed to pay the tax to the state themselves if they don't get charged it, but the vast majority didn't.
The effort was lead by South Dakota, but more than 40 states have asked the Supreme Court to abandon its current sales tax collection rule , saying that as a result of it and the growth of internet shopping, they're losing billions of dollars in tax revenue every year.
South Dakota wanted out-of-state retailers to begin collecting the tax and sued Overstock.com, home goods company Wayfair and electronics retailer Newegg.